Redesigning carbon emissions reduction policies for China’s manufacturing industry: a dynamic stochastic general equilibrium approach

The design of China’s industrial carbon reduction policies is still in its early stages, so currently, comparing the effectiveness various emission can help China policies. This paper develops a dynamic stochastic general equilibrium (DSGE) model manufacturing industry and investigates impact innovation on environmental protection technology, emissions tax, government expenditures output industry. Unlike previous studies that examined one policy using single model, by focusing differences between three shocks it possible to make more comparable, comparison convincing. results indicate updating technology promote development reduce short term. Carbon taxes have negative effect term significant lasting long government’s positive term, but non-significant Chinese should take lead implementing tax heavily polluting industries regions while lowering stabilizing expenditures.